SATISFACTION AND ASSIGNMENT AGREEMENT
EXHIBIT 10.1
SATISFACTION AND ASSIGNMENT AGREEMENT
This Satisfaction and Assignment Agreement (this “Agreement”) is made and entered into this 4th day
of January, 2016 (the “Effective Date”) by and among Abakan, Inc., a Nevada corporation (“Abakan”) and
MesoCoat, Inc. a Nevada corporation (“MesoCoat”), and creditors Xxxxxx Town Associates S.A. (“Xxxxxx
Town”), Sonoro Invest S.A. (“Sonoro”), Xxxxxx X. Xxxxxxxx (“Xxxxxxxx”), and the Abakan Petitioning
Creditors (as hereinafter defined) (Xxxxxx Town, Sonoro, Eberhard and the Abakan Petitioning Creditors,
collectively, the “Creditors”, and together with Abakan and MesoCoat being hereinafter collectively referred
to as the “Parties” and individually a “Party”).
RECITALS
WHEREAS, Abakan and MesoCoat owe at least $1.78 million to secured creditor Xxxxxx Town as set
forth in a judgment duly entered by the United States District Court for the Southern District of New York on
August 18, 2015. Xxxxxx Town made an additional senior secured loan to MesoCoat on September 3, 2015
of up to $500,000, which shall survive this Agreement, remain in effect and outstanding pursuant to its terms
and is explicitly not part of this Agreement;
WHEREAS, Abakan owes at least $3.215 million to senior creditor Sonoro as set forth in a judgment
duly entered by the United States District Court for the Southern District of Florida on October 8, 2015;
WHEREAS, Abakan owes approximately $850,000.00 to Eberhard pursuant to two promissory notes
from Abakan to Eberhard;
WHEREAS, Abakan owes approximately $357,209.00 in the aggregate () to Xxxxx van der Gulik,
Xxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx & Associates, and Xxxxxxxx Xxxxxxxxxx (collectively,
the “Abakan Petitioning Creditors”);
WHEREAS, MesoCoat owes approximately $42,000.00 in the aggregate (together with the
indebtedness to Xxxxxx Town, Sonoro, Eberhard, and the Abakan Petitioning Creditors, the “Claims”) to Huge
Heating & Cooling Co., Inc., Xxxx Xxxxxxxxxxx Management Consulting, LLC, Xxx Xxxxx, and Xxxxx
Systems, Inc. (collectively, the “MesoCoat Petitioning Creditors”)
WHEREAS, MesoCoat is a wholly owned subsidiary of Abakan;
WHEREAS, judgment creditor Xxxxxx Town has a security interest in all of the assets of MesoCoat
(with certain exceptions) and is authorized to and has taken possession of the assets of MesoCoat which are
currently held in trust for Xxxxxx Town’s benefit by the Federal Court appointed receiver of Abakan and
MesoCoat - Xxxxxx X. Xxxxxx (the “Receiver”).
WHEREAS, the Receiver obtained an independent valuation report of MesoCoat indicating that the
fair value of the equity of MesoCoat is $3,584,107 as of August 31, 2015;
WHEREAS, MesoCoat guaranteed Abakan’s obligations to Xxxxxx Town;
WHEREAS, as set forth herein, Xxxxxx Town, Sonoro, Eberhard, the Abakan Petitioning
Creditors, and the MesoCoat Petitioning Creditors have reached an intercreditor agreement regarding the
debts owed to each of them by Abakan and MesoCoat; and
WHEREAS, Abakan and MesoCoat desire to satisfy the Claims in full by making certain transfers
to the Creditors, pursuant to the terms of this Agreement.
EXHIBIT 10.1
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
1.
Consideration; Satisfaction and Discharge.
a. Consideration. Abakan and MesoCoat hereby make the following transfers (together with
the covenants and obligations of Sections 5 and 6 hereof, the “Consideration”) in
consideration of the Creditors’ discharge of Abakan and MesoCoat from their obligations
to pay the Claims, as contemplated herein:
i. Transfer of MesoCoat Stock. Abakan hereby conveys and transfers seventy-seven
and 50/100 percent (77.5%) of its stock and ownership in MesoCoat, free and clear
of all liens, claims and encumbrances, being seventy-seven and 50/100 percent
(77.5%) of all issued and outstanding stock of MesoCoat (“MesoCoat Stock”), to
the Creditors, and hereby irrevocably authorizes the transfer agent to transfer such
seventy-seven and 50/100 percent (77.5%) of the MesoCoat Stock (the
“Transferred Stock”) on the books of MesoCoat, with full power of substitution,
to the Creditors.
ii. Claims of the MesoCoat Petitioning Creditors. Within fourteen (14) days of the
closing of this Agreement, MesoCoat shall pay in full the claims of the MesoCoat
Petitioning Creditors.1
b. Satisfaction and Discharge. The Creditors hereby accept the Consideration in full satisfaction
of the Claims and discharge Abakan and MesoCoat from any further obligation to pay the
Claims.
c. Ownership of MesoCoat Stock. The Parties hereby agree that from and after the transfer
of MesoCoat Stock described herein, the ownership of the MesoCoat Stock shall be as
follows:
Xxxxxx Town:
38.75%
Sonoro:
28.17%
Eberhard:
7.44%
Abakan Petitioning Creditors:
3.14%2
Abakan:
22.50%
Total:
100.00%
1 The claims owed each of the MesoCoat Petitioning Creditors to be paid in full are as follows: Huge Heating &
Cooling Co., Inc.: $9,557.54; Xxxx Xxxxxxxxxxx Management Consulting, LLC: $3,367.83; Xxx Xxxxx: $9,995; and
Xxxxx Systems, Inc.: $18,981.72.
2 This 3.14% portion of the MesoCoat Stock shall be divided among the Abakan Petitioning Creditors on a pro rata
basis based upon the amount of their claims as follows: Xxxxx van der Gulik: $81,829.60; Xxxxxx Xxxxx: $25,000;
Xxxxxx Xxxxxx: $94,480; Xxxx Xxxxx: $105,000; Xxxxx & Associates: $20,000; and Xxxxxxxx Xxxxxxxxxx: $30,900.
EXHIBIT 10.1
2.
Acknowledgments. Although Xxxxxx Town is a secured party, it explicitly and knowingly
agrees to this arrangement with the other Creditors; and although Sonoro’s claim against Abakan is
significantly larger than Xxxxxx Town’s and Eberhard’s claims, Sonoro recognizes that as a secured creditor
Xxxxxx Town’s claim may have priority over its own claim and therefore explicitly and knowingly agrees
to this arrangement with the other Creditors. Eberhard and the Abakan Petitioning Creditors also explicitly
and knowingly agree to this arrangement given that their claims are unsecured and smaller than the claims
of the other Creditors.
3.
Abakan and MesoCoat Release. Abakan hereby releases and forever discharges MesoCoat, and
Abakan and MesoCoat hereby release and forever discharge Xxxxxx Town, Sonoro and Eberhard, and their
respective principals, directors, officers, members, owners, shareholders, employees, consultants, advisors,
attorneys and affiliates (collectively, the “Releasees” including MesoCoat to the extent applicable) from any
and all demands, claims, liabilities, debts, inter-company loans and /or advances, causes of action, actions,
judgments, and suits, whether based in law or equity, whether accruing before or on the Effective Date,
whether based in contract or tort or otherwise, that Abakan or MesoCoat may have against the Releasees.
4.
Abakan Petitioning Creditors and MesoCoat Petitioning Creditors Release. Except as
otherwise provided herein, the Abakan Petitioning Creditors and the MesoCoat Petitioning Creditors
(collectively, the “Petitioning Creditors”) hereby release and forever discharge Abakan, MesoCoat, Xxxxxx
Town, Sonoro, and Eberhard and their respective principals, directors, officers, members, owners,
shareholders, employees, consultants, advisors, attorneys and affiliates (collectively, the “Releasees of
Petitioning Creditors” including MesoCoat to the extent applicable) from any and all demands, claims,
liabilities, debts, inter-company loans and /or advances, causes of action, actions, judgments, and suits,
whether based in law or equity, whether accruing before or on the Effective Date, whether based in contract
or tort or otherwise, that Petitioning Creditors may have against the Releasees of Petitioning Creditors. To
the extent any of the Petitioning Creditors own stock in Abakan, this Agreement shall not impair such
ownership. Xxxxxx Town, Sonoro, Abakan, and MesoCoat agree to not pursue claims before Judge Cristol
against Petitioning Creditors or their counsel, Xxxxx Xxxxx, Esq., under section 303 of the Bankruptcy Code.
In the event Petitioning Creditors participate in another involuntary bankruptcy as against Abakan and/or
MesoCoat, then the obligation of Xxxxxx Town, Sonoro, Abakan, and/or MesoCoat to refrain from pursuing
Petitioning Creditors and/or their counsel Xxxxx Xxxxx, Esq. under section 303 of the Bankruptcy Code shall
be extinguished and all monies and equities received pursuant to this Agreement shall be forfeited and
remitted to Xxxxxx Town. The Petitioning Creditors explicitly and knowingly agree and hereby acknowledge
that they are not released from any demands, claims, liabilities, debts, inter-company loans and /or advances,
causes of action, actions, judgments, and suits, whether based in law or equity, whether accruing before or
on the Effective Date, whether based in contract or tort or otherwise.
5.
Receiver. The Creditors hereby release and forever discharge the Receiver, from any and all
demands, claims, liabilities, causes of action, actions, judgments, and suits, whether based in law or equity,
whether accruing before or after the Effective Date, whether based in contract or tort or otherwise, that
Creditors may have against the Receiver.
6.
Garnishment Transfer. In connection with its Claim, Xxxxxx Town garnished certain bank
accounts of Abakan and MesoCoat. Xxxxxx Town hereby agrees to convey and transfer any monies received
from such garnishment(s) to MesoCoat.
7.
Powdermet, Inc. Payments. Abakan agrees that any and all cash installment payments it is
entitled to receive from Powdermet, Inc. (“Powdermet”) on or after the Effective Date in accordance with
EXHIBIT 10.1
the Settlement and Exchange Agreement between Abakan and Powdermet dated as of July 23, 2015, shall be
made by Powdermet directly to MesoCoat without offset of any kind, pursuant to instructions to be provided
from the Receiver. Nothing herein shall affect any remaining ownership interest Abakan may have in
Powdermet stock.
8.
Satisfactions of Judgment. Upon execution of this Agreement the Creditors shall, to the extent
applicable, file Satisfactions of Judgment for any judgment that they hold against Abakan or MesoCoat.
9.
Termination of Receiverships. Ninety-one (91) days after the Effective Date, the receiverships
shall terminate and the Receiver shall file his final accountings with the Court.
10. Entire Agreement. This Agreement, together with the schedule attached hereto, contains all of
the agreements of the Parties hereto with respect to the subject matter hereof and no prior agreement,
understanding or representation pertaining to any such matter shall be effective for any purpose. No
provision of this Agreement may be amended except in writing signed by the Parties hereto.
11. Counterparts. This Agreement may be executed in any number of counterparts with the same
effect as if all Parties hereto had signed the same document. All such counterparts shall be construed together
and shall constitute one instrument.
12. Binding Contract. The terms and provisions hereof shall be binding upon and inure to the benefit
of the Parties hereto, their transferees, representatives, successors and assigns.
13. Authority. The Parties hereby represent and warrant that they have all necessary power and
authority to execute and deliver this Agreement.
14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws
of the State of New York. The Parties agree that venue shall only be proper in the
federal courts located in New York, NY.
15. Captions. The captions and headings of the numbered paragraphs of this Agreement are
inserted solely for the convenience of the Parties and are not a part of this Agreement and shall have no
effect upon the construction or interpretation of any part hereof.
16. Severability. If any provision of this Agreement or the application thereof to any person or
circumstances shall be invalid or unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.
EXHIBIT 10.1
ACKNOWLEDGED AND AGREED TO:
MESOCOAT, INC.
/s/ Xxxxxx X. Xxxxxx, Esq.
/s/ Xxxxxx X. Xxxxxx, Esq.
Name: Xxxxxx X. Xxxxxx, Esq.
Name: Xxxxxx X. Xxxxxx
Title: As Court appointed Receiver for
Title: As Court appointed Receiver for
Abakan, Inc. and not in individual
MesoCoat, Inc. and not in individual
capacity
capacity
CREDITORS:
XXXXXX TOWN ASSOCIATES S.A.:
By: /s/ Xxxxxxxxx Xxxxxxxxx
Name: Xxxxxxxxx Xxxxxxxxx
Title: Director
SONORO INVEST S.A.:
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Director
EBERHARD:
/s/ Xxxxxx X. Eberhard_____________
Xxxxxx X. Xxxxxxxx, individually
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
EXHIBIT 10.1
ABAKAN PETITIONING CREDITORS:
/s/ Xxxxx van der Gulik________________
/s/ Xxxxxx Xxxxx
Xxxxx van der Gulik
Xxxxxx Xxxxx
/s/ Xxxxxx Graves______________________
/s/Xxxx Ammon__________________
Xxxxxx Xxxxxx
Xxxx Xxxxx
/s/ Xxxxxxxx Chernyakov_________________
XXXXX & ASSOCIATES
Xxxxxxxx Xxxxxxxxxx
By: /s/ Xxxx Ammon______________
Name: Xxxx Xxxxx
Title: President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
EXHIBIT 10.1
MESOCOAT PETITIONING CREDITORS:
HUGE HEATING & COOLING CO., INC.
XXXX XXXXXXXXXXX
MGMT. CONSULTING, LLC
By: /s/ Xxxxx Brenneis__________________
By: /s/ Xxxx Baumgardner_________
Name: Xxxxx Xxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: President
Title: Principal
/s/ Xxx Hymes_________________________
XXXXX SYSTEMS, INC.
Xxx Xxxxx
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice-President
